Outrage mounts over NAB cuts

April 8 2002

In the face of mounting outrage, Australia's biggest bank denied today it had abandoned country customers, insisting that the closure of 56 branches in rural areas and the announcement of 2,000 staff redundancies was "a good news story".

Both the closures and the redundancy plan are part of a restructuring of the National Australia Bank's operations in Australia, New Zealand and Europe.

NAB chief executive Frank Cicutto today attempted to put a gloss on the bank's Positioning For Growth program, which will mean the loss of 1,500 Australian jobs.

He said in every town where a branch closure occurred, service levels would remain the same or improve thanks to the bank's newly forged relationship with Australia Post.

"What this is, is a good news story," Mr Cicutto said. ");document.write("

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"We have not abandoned these towns, we haven't asked customers to travel to the next town.

"We have asked them to walk across the road."

Under the relationship with Australia Post, customers will be able to conduct banking business at their local post office.

Instead of the part-time operation currently offered in towns where branches would close, customers would have full-time access to the same banking services, the NAB said.

Today's announcements had been foreshadowed, but nevertheless sparked an angry reaction from unions and consumer groups.

The Finance Sector Union (FSU) said it would apply to the Australian Industrial Relations Commission to force the bank to reveal the details of the job cuts and to halt any closures.

FSU national assistant secretary Paul Schroder said the NAB plan showed it was out of touch with the community.

"This is horrible. It's absolutely massive," he said.

Consumer advocate John McLennan urged the federal government to use taxes to punish banks that damaged communities by closing branches.

"What they're (the banks) doing is raping the very community that they're there to serve," he told Sky News.

Financial Services Consumer Policy Centre director Chris Connolly called on the federal government to set up a voluntary social charter for banks to stop similar job losses in the future.

"I think it would be worth having a shot at a voluntary social charter - but if it didn't work then they would have to pursue some more legislative options," he said.

Australian jobs lost in the restructure, which Mr Cicutto said was unrelated to the $4 billion collapse last year of NAB's American mortgage business, HomeSide, will be mainly in administration and back office areas.

"Overall there will be a reduction of 3,400 positions, but this will be offset by the creation of 1,400 new positions and natural attrition and redeployment," Mr Cicutto said.

The redundancies would cost as much as $225 million.

On the positive side, the National plans to spend $200 million over three years on wealth management operations in Australia.

A further $185 million will be spent in the same area in Europe and the United States.

Mr Cicutto also promised a new level of performance from the bank, along with a "different and vibrant" culture which would be delivered to customers with dignity and professionalism.

"Our stakeholders are at the heart of our decision-making," Mr Cicutto said.

In line with the new culture there would be an increase in the number of front-line staff in the bank's Australian operations.

While the Positioning For Growth program would allow NAB to capture growth opportunities in a variety of areas, Mr Cicutto said no further changes would be made to NAB's fee structure for personal transactions.